Seizure and Sale Procedures Can Be Improved

For those with any experience dealing with the Internal Revenue Service, it may come as no surprise that the entity has some room for improvement.  According to a report recently released by the Treasury Inspector General for Tax Administration (TIGTA), the IRS needs to improve its compliance with procedures for conducting sales of property seized for unpaid taxes.

To break it down, TIGTA recommended that the IRS do the following to improve its seizure and sale procedures:

  • Mandate that Property Appraisal and Liquidation Specialists (PALS) consistently prepare a detailed sale plan once they accept custody of the seized property
  • Document the return of all personal items from seized vehicles; and
  • Require the PALS to follow Internal Revenue Manual (IRM) requirements for conducting a sale adjournment and recalculating the minimum bid, and ensure that any adjustments are supported by the facts of the situation and properly documented.

In response to the report, IRS officials did agree with most of the recommendations; however, disagreed with two recommendations to add IRM guidance for:

  • Indirect expenses of seizure sales that can be charged to the taxpayer and
  • Return of license plates from seized vehicles that are sold. TIGTA maintains that the appropriate IRM sections should be updated to provide clear guidance for IRS employees and managers to follow.

It is safe to say that the IRS, in performing its duties, does not always seem to place a high priority on protecting taxpayer rights or advising taxpayers of the different rights and remedies available to them under the law. There are provisions in place to help ensure that taxpayers are properly advised and taxpayer rights are honored. Yet, given the opposing interests of the parties and the overarching function of the IRS to collect revenue, these taxpayer protections sometimes seem to be treated as a mere formality in practice.  This illustrates why it is important and valuable to have an experienced representative working on your behalf to advocate for and protect your best interests at all times while resolving your outstanding tax liabilities.

We understand that the world of tax resolution can be confusing, click here if you’d like to connect with a tax expert today to discuss your situation in more detail.  If you are a tax professional, take a look at some of these useful resources, we hope you find them to be helpful.